Regular readers of the ol' blog noticed last week that I mentioned tax scams and identity theft in a couple of post last week. If you missed them, they were on added Internal Revenue Service efforts this filing season to detect tax scams and return fraud and about how filing early helps beat tax ID thieves to the stolen refund punch. Well, here’s a third mention. And this time, it’s some good news from the National Taxpayer Advocate (NTA). The IRS is making progress in reducing the time it takes to help people who are victims of tax-related identity theft.... Read more →
Identity Theft
Photo by Nataliya Vaitkevich Beating identity thieves to the punch is one reason to file your tax return as soon as you can. Getting your legitimate Form 1040 to the Internal Revenue Service first will stop crooks who try to file a fake return in your name. But that’s not the only tax fraud increase that the tax agency sees each filing season. So, this year, the IRS and its partners in the Coalition Against Scam and Scheme Threats (CASST) are taking new and additional actions to lessen the threats. The CASST task force, comprised of representatives from federal and... Read more →
Fortune cookie tax filing wisdom (Photo by Kay Bell) We’re into the second official day of the 2025 tax season and millions of taxpayers have already filed their returns. This post is not for you. It’s for folks who haven’t yet even thought about their 2024 tax year returns. That’s okay. We all work at our own pace. But there actually are some good reasons to get to your annual tax filing task sooner rather than later. Here are 10. 1. To get your federal tax refund sooner. This is the main reason early filers get their 1040 forms to... Read more →
Millions are getting ready to file federal tax returns so they can collect refunds. Crooks are among them. And things get even worse for the taxpayers whose identities were stolen and used to file false returns claiming fraudulent refunds. The average time it took the Internal Revenue Service to resolve identity theft cases and issue refunds to the affected victims in fiscal year 2024 was two years, according the National Taxpayer Advocate’s 2024 annual report to Congress, issued today. These delays impacted nearly half a million taxpayers, noted National Taxpayer Advocate (NTA) Erin M. Collins, and were even worse than... Read more →
Photo by Kaboompics.com It’s Thanksgiving Week! The end-of-year holidays are officially here. So is scam and identity theft season. So it’s no surprise that this time of year, the Internal Revenue Service and its Security Summit partners spend a week focusing on ways taxpayers and tax professionals can protect their and clients’ sensitive financial information from tax scammers. Yes, in addition to trying to steal your identity and cash and holiday cheer, tax crooks are preparing for the upcoming filing season. They can use the information they stole to file fake tax returns claiming fraudulent tax refunds. Almost a decade... Read more →
The Internal Revenue Service has made good progress in stopping fraudulent filings, but there’s always room for improvement. And there are ways taxpayers can help not only the IRS, but also themselves when it comes to filing security. Most U.S. taxpayers can obtain an identity protection personal identification number, or IP PIN. An IP PIN is a special six-digit number issued by the IRS to requesting individuals who have a Social Security number (SSN) or an Individual Taxpayer Identification Number (ITIN). Since only IP PIN recipients and the IRS know their number, the special code serves as a way to... Read more →
The modern wooden replica of the Trojan Horse, created in 1975 by the Turkish architect İzzet Senemoğlu, stands today at the ruins of Troy archaeological site in Turkey. (Photo: Turkish Archaeological News) Two Nigerian men, one living in North Dakota and the other in Mexico, have been charge with in connection with a scheme to allegedly steal client information from several Massachusetts tax preparation firms’ computer networks. Federal investigators allege that once the duo got the tax data, they filed fraudulent returns and had the associated false tax refunds deposited in bank accounts the pair controlled. In total, the scheme’s... Read more →
Both taxpayers and the Internal Revenue Service depend on tax professionals doing their jobs in, well, a professional manner. A crucial part of the job is ensuring the security of clients’ tax information. Security measures are particularly important as everyone — tax pros, taxpayers, and the IRS — increasingly rely on electronic methods to complete tax tasks. In fact, tax professionals are legally required to secure their clients’ data. The Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act after the names of its primary Congressional sponsors, mandates that financial institution companies ensure the security and confidentiality... Read more →
Hackers got their hands on information from around 110 million AT&T customers when they were able to breach the company’s records. The data stolen from the telecom is only the latest security breakdown. At least 1 billion records have been stolen or accessed in data breaches this year, according to TechCrunch. All those stolen records are one reason why so many of us are getting more phishing emails and smishing texts. The illegally obtained data also helps crooks and con artists gain entry into additional networks that have high-value information, like taxpayer data. That’s why the Internal Revenue Service and... Read more →
Photo by Nick Night on Unsplash All taxpayers are supposed to be guaranteed privacy when it comes to their tax information filed with the Internal Revenue Service. Unfortunately, the IRS’ system is not immune to security breaches. Most of the time, it’s regular taxpayers like you and me whose personal data is of interest to crooks who want it to file fraudulent tax returns. But from 2018 to 2020, an IRS contractor stole years of tax returns and filing information related to thousands of the United States' wealthiest people. The contractor, Charles Littlejohn, then disclosed that tax info to the... Read more →
Photo by Erik Mclean on Unsplash Waiting on your Internal Revenue Service tax refund is frustrating. In most instances, though, the issues that slowed the tax refund are resolved and the money is issued in a relatively reasonable amount of time. Unfortunately, that’s not the case for the hundreds of thousands of filers whose personal information was used by identity thieves trying to intercept the real taxpayers’ refunds. Not only must they go through the process of alerting the IRS of the stolen identity and fraudulent refund claim, their wait for their rightful refunds takes much, much longer. In some... Read more →
Today's post on the second half of the 2024 Internal Revenue Service's Dirty Dozen tax scams looks at a wide range of schemes and potential victims. Tax pros are targets, as are high income earners in schemes 7 through 12. Together with the Dirty Dozen's first six scams posted last week, there's a scam for almost all of us taxpayers. Take notice and don't become a Dirty Dozen victim. Last Friday, I shared the first six of the Internal Revenue Service's annual Dirty Dozen list. As promised, this post wraps up schemes, cons, and scams 7 through 12. This compilation... Read more →
Perennial tax schemes, some tweaked ones, and a few new scams, make the 2024 version of the IRS Dirty Dozen. And these featured today are just the first six of the 12 cons the IRS calls out in 2024. The final 7 through 12 on the annual infamy list will be posted next week is posted here. This week, as it does every week, the Department of Justice's Tax Division announced civil and criminal actions against several businesses and individuals accused of betraying taxpayer trust and cheating the Treasury Department out of tax dollars. Some of those who were part... Read more →
Photo by Marten Newhall on Unsplash The biggest recent scam story had nothing to do with taxes. It was the confession of a financial advice journalist of how she fell for an elaborate con job that ended with her putting $50,000 in cash in a box and handing it to a stranger. The crooks kicked off that scam by calling the writer, recounting enough of her personal information to get her hooked. It was all downhill from there, with an outrageous combination of purported government agencies, including a CIA impersonator. IRS security still suspect: We're all told to protect our... Read more →
Crooks know you're anxiously awaiting your tax refund. That's why this filing season they're again impersonating Internal Revenue Service agents. The latest refund scam is an email or text about your tax refund or tax refund e-statement. In both cases, warns the Federal Trade Commission (FTC), the messages are efforts to steal your identity and money. As in previous incarnations, these latest fake IRS messages encourage recipients to click a link, supposedly to "check on your tax refund e-statement," or "fill out a form to get your refund." The FTC provided the image below of one of these fake IRS... Read more →
Fortune cookie tax filing wisdom (Photo by Kay Bell) If the 2024 tax-filing season is anything like previous ones, millions of taxpayers sent their 2023 taxes to the Internal Revenue Service today, the official start of federal return processing. The most obvious and common motive for first-day filing is to get expected refunds. But there are some other reasons you might want to file your taxes early. Here are eight. 1. To beat tax ID thieves to the punch. The IRS and its Security Summit partners have made good progress in recent years in reducing tax identity theft and associated... Read more →
The biggest complaint about taxes is that they're too high. A close second is that the language of taxes is hard to understand. The Internal Revenue Service can't do anything about the first one. You need to call your members of Congress to complain about tax rates. But Uncle Sam's tax collector is taking steps to make some tax communications more comprehensible. Improving intelligibility: Under the IRS' Simple Notice Initiative, the agency aims to simplify and clarify hundreds of the letters it sends annually to taxpayers. The notice redesign effort will build this year on the Paperless Processing initiative the... Read more →
Photo by Nataliya Vaitkevich A new tax season also brings the resurgences of tax scams. The Internal Revenue Service and its Security Summit partners earlier this month alerted tax professionals to watch out for a new round of filing season-related email schemes where cybercriminals pose as potential clients. Now FinCEN, the Treasury Department bureau that focuses on financial crimes, notably money laundering and terrorism, reports that there have been fraudulent attempts to obtain information from individuals and entities who may have to comply with new Corporate Transparency Act reporting requirements. Here's a look at these two schemes popping up as... Read more →
The 2024 tax filing season has started. Sorta. Eight tax software companies now are available to eligible Free File taxpayers. Some business returns can be e-filed starting Tuesday, Jan. 16. On Monday, Jan. 29, the Internal Revenue Service officially begins processing all 2023 tax returns. While this filing season is expected to be relatively smooth, some taxpayers typically encounter problems. And every year, the National Taxpayer Advocate (NTA) details the most annoying tax complications that we, and the IRS, face. 10 most serious taxpayers problems: Those concerns are included in NTA Erin M. Collins' 2023 Annual Report to Congress, released... Read more →
This pup looks like he's asking it it's time to open gifts. (Photo by Unsplash+ in collaboration with Getty Images) Next Monday morning, Dec. 25, many families will welcome a new member. I'm talking, of course, about a pet. A puppy, kitten, or other pet of any type of age can be a wonderful addition to a home. Pros and cons of pets as presents: But many animal groups and veterinarians warn against giving a pet, especially as a surprise, during the holidays. This already is a stressful time for many, and if everyone who will be involved in the... Read more →